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SNP Optimizer- Solution for Make To Stock SCM Table of Contents Revision History. 2 Abstract 5 Conventions se!. 5 " #ntro!uction. 6 $ SNP Optimizer 7 2.1 Master Data in optimizer 8 2.2 Transaction Data in optimizer 8 2.3 Costs in optimizer 9 2.4 Optimization Logic. 9 2.5 Optimizer es!"t #na"$sis. 1% 2.5.1 &np!t Log. 1% 2.5.2 O!tp!t' es!"t Log. 14 % Conclusion. 16 & 'efinitions( Abbreviation an! Acronyms. 16 ) References. 16 * Ackno+le!,ements. 16 Table of #llustrations

Figure 1: Optimization Model in terms of the Masters and Constraints


(ig!re 2) Optimization mo*e"

Figure 3: Supply Chain


Abstract SNP Optimizer is a uni-ue tool to mo!el Supply c.ain/ #t is a perfect tool to 0Make To Stock1 scenario an! +orks on Cost base! prioritization/ Optimizer Consi!ers 'eman! 2lements( safety S tocks an! various receipts elements as +ell as creates Stock transfers 3 Pro!uction Or!ers/ Optimizer enables plannin, of 456s an! S456s too/ Optimizer consi!ers resource capacity an! !oes constraine! base! plannin,/ SNP Optimizer result analysis is not available in any stan!ar! !ocument an! t.e analysis is provi!e! by SAP as pai! consultin,/ T.e paper .i,.li,.ts t.e Make to stock mo!el mappe! in SNP optimizer an! t.e complete analysis of t.e SNP Optimizer result lo, Conventions se!

1 Introduction
SNP optimizer is a tool use! by APO +.ic. +orks on t.e cost lo,ics/ 7arious costs in t.e supply c.ain can be t.e ,ui!eline for an optimal solution/ T.e optimizer +orks on t.e t+o ma8or ob8ective functions an! t.ose are Profit ma9imization an! Cost Minimization/ #f +e are operatin, on 4ront 2n! supply C.ain +it. a !ecision to increase

mar,ins +e can use Profit ma9imization/ #f +e are operatin, in t.e back en! of t.e supply c.ain t.e ma8or ob8ective of t.e business is to save cost .ence t.e Cost Minimization ob8ective can be use! to operate in t.ese scenarios/ 4i,ure ": Optimization Mo!el in terms of t.e Masters an! Constraints

2 SNP Optimizer
4i,ure $: Optimization mo!el

4i,ure %: Supply C.ain

2.1 Master Data in optimizer


T.e essential master !ata consi!ere! in t.e SNP Optimizer can be liste! as follo+s:

2.2 Transaction Data in optimizer


T.e essential transaction !ata consi!ere! in t.e SNP Optimizer can be liste! as follo+s:

2.3 Costs in optimizer


4ollo+in, are t.e costs +.ic. are consi!ere! in optimizer:

2.4 Optimization Logic


T.e ob8ective function of t.e optimizer ,ui!es to mo!el to keep t.e Total Cost of t.e supply c.ain to be minimum/ Total Cost of t.e mo!el can be !efine! as: Here to save one set of cost +e .ave to incur ot.er/ T.is can be e9plaine! +it. e9amples: 1. 2. To sa+e on Deman* Lost an* Deman* De"a$ pro*!ction an* Transportation Cost is to ,e inc!rre* &f -e store a .!antit$ at a "ocation to meet t/e safet$ norm -e /a+e to inc!r t/e 0torage Cost T.e optimization mo!el is create! as e-uations an! solve! usin, t.e ;inear Pro,rammin, problem/ An optimization mo!el in mat.ematical optimization consists of four key ob8ects:

2.
1. 2.

Optimizer !esu"t #na"$sis


T.e results of t.e optimization run are store! in t.e Optimizer lo,/ T.e lo,s are split in t+o .alves &np!t Log -/ic/ /as a"" t/e inp!t *ata consi*ere* for t/e r!n O!tp!t Log -/ic/ contains t/e res!"t of t/e r!n

2. .1 Input Log
ET_BUCKDF: Contains t.e !etails of t.e bucket an! t.e .orizon of t.e run

Masters considered in the Logs:


Location Products: To c.eck if t.e Pro!uct an! t.e location .ave participate! in t.e run ET_ARC: Contains t.e !etails about t.e lanes bet+een source to !estination an! t.e Transportation 'uration

ET_ARCMAT: Contains furt.er !etails about t.e lanes at pro!uct level an! t.e Transportation Cost <Per 2A= ET_PROMO: Contains !etails about PPMs t.e Min ;ot Size Resource use! an! t.e Pro!uction Cost ET_PROMAT: Contains !etails about input pro!ucts in t.e PPM an! t.e C.ar,e >uantity as 7ar >uantity ET_PRORES: Contains !etails about t.e time re-uire! to pro!uce t.e c.ar,e >uantity an! also .as t.e resource on +.ic. t.e pro!uction +ill .appen ET_RESC: Contains !etails about t.e capacity of t.e resource !efine! in Sec an! t.e initial consumption of t.e resource <if any=

Transaction Data in the Logs:


ET_DEMA D: Contains t.e 'eman! per bucket/ All t.e t.ree 'eman! Class +ill be reflecte! in t.is ;o, ET_DEMCLT!M: Contains t.e 'eman! 'elay Cost <Per 2A per ?ucket=( 'eman! ;ost Penalty per perio! <Per 2A= per bucket/ Also t.e permissible !eman! !elay <#n 'ays= ET_LOCPROD: Contains t.e #n-Transit an! t.e safety Stock >uantity an! also t.e Safety Stock number of !ays maintaine! at t.e location ET_LOCMAT: Contains t.e #nitial Stock present for t.e pro!uct at t.e locations/ Also .ave t.e information about t.e Safety Stock 7iolation Cost <Per 2A Per 'ay= an! Stora,e Cost <Per 2A Per 'ay= at eac. location ET_RES! !: Contains t.e fi9e! pro!uction or!ers

2. .2 Output%!esu"t Log
!T_DEMA D: Contains t.e !etails of t.e 'eman! met for t.e bucket in t.at location/ 'eman! !elaye! is also visible in t.is lo, Ca"cu"ations: 'elivere! >ty %@A is !elaye! by a ?ucket <Beek in t.is case=/ 'elay per 2A Per bucket for COMH"AA at A?'H is "%/*/ Total 'elay +ill be #$%&'#()&$*$ da+s ,or one -ee./ 0 #1223 !T_ OTDEL!: Contains t.e !etails of t.e 'eman! unmet for t.e bucket in t.at location/ Ca"cu"ations: T.e !eman! lost is for &&A 2A an! t.e !eman! lost penalty for bucket "@ for 'eman! Class $ for COMH"AA at A?'H is &$A$/&AA/ De4and Lost Pena"t+ 0 33%&32%2(3 0'536%1) !T_PROMO: Contains t.e !etails of t.e Pro!uction lots pro!uce! an! Total Pro!uction Cost Production 7t+ C Pro! >ty D C.ar,e >uantityC $/$@AD %%%%)/A C @)*@" 2A PPM Cost C Pro! >ty D PPM Costs C$/$@A D %E@F** C EEA)FF Pro!uction >ty is roun!e! to t.ir! !ecimal/ Actual value is 2(2)6$53 !T_ARCMAT: Contains t.e !etails of t.e total Stock transfer .appene! to A?'H Trans8ortation cost0 >uantity <Stock Transfer= D Transportation Cost per 2A <2TGARCMAT= C$"E%/**@ DA/AFF C $"*/"E !T_LOCMAT: Contains t.e !etails of t.e Stora,e Cost an! t.e Safety Stock 7iolation Cost Ca"cu"ations: Tota" Storage Cost C Stora,e >ty D Stora,e Cost per 2A Per 'ay D 'ays in t.e ?ucket C &$F/%%D A/"@A D@ C )"A/FA@ Sa,et+ Stoc. 9io"ation Cost C Safety stock violation >ty D Safety Stock violation penalty Per 2A Per 'ay D 'ays in t.e ?ucket C @**/**@D $/"@* D@ C ""*@@/E*@

3 Conc"usion
012 Optimizer is a !ni.!e too" to mo*e" 3Ma4e To 0toc45 scenario in 0!pp"$ c/ain. 6or4s on t/e Cost ,ase* prioritization an* consi*ers Deman* 7"ements8 0afet$ 0toc4s an* +ario!s eceipts e"ements as -e"" as create 0toc4 transfers 9 2ro*!ction Or*ers

T/is paper -i"" ena,"e an 012 Cons!"tant in Compan$ to interpret an* ana"$ze t/e p"anning process in an 012 optimizer. T/e cons!"tant -i"" 4no- not on"$ 4no- t/e masters an* transaction *ata consi*ere* in t/e r!n ,!t -i"" a"so 4no- t/e cost *efine* an* t/e o!tp!t of t/e optimizer to ,e c/ec4e* in -/ic/ "ogs

4 De&initions' #((re)iation and #cron$ms


#cron$m 22M Description 2ro*!ction 2rocess Mo*e"

!e&erences
&tem ea" Optimization -it/ 0#2: #2O Description ;osef <a""rat/= T/omas &.Main*"

* #c+no,"edgements
1ame Description